The Euro rose to a four-week high against the weaker US Dollar. The Single currency was boosted after the release of poor US economic data on manufacturing and employment that firmed opinions that US interest rates will remain low for the time being. For the past couple of days the Single Currency has been driven up by optimism that Greece will avoid defaulting on its debt. EURUSD soon lost steam and dropped as profit-taking ensued, bringing down the pair to a session low of 1.4322 from its four-week high of 1.4457.
Sterling made losses against most majors after weak manufacturing PMI data suggested the UK economy is still struggling to recover as growth has stalled. The Pound extended losses against the Dollar well into the US session, losing over 90 pips from 1.6424 to 1.6330. The Pound also lagged behind a rising Euro until the Single Currency took a downturn after EURGBP hit a two-week high at 0.8807.
The safe haven Swiss Franc was driven to a fresh all time high against the US Dollar after weak US economic data put further pressure on the greenback. Increased retail sales in Switzerland released today also boosted the Swiss currency. USDCHF continued to fall in the US trading session from 0.8465 to a new record low of 0.8382 before rebounding to 0.8425. EURCHF also hit a record trough, plunging over 230 pips from an earlier European session high of 1.2317 to 1.2080, as demand for the safe haven currency increased against a fragile Euro.
The Canadian Dollar lost all gains made against the greenback since Monday as the falling US Dollar dragged down commodities, mainly crude oil prices. After the release of weak US manufacturing PMI data and employment data this afternoon, investors pictured a gloomy global recovery, prompting them to flee from risky assets like commodities which are dependant on global growth. The Loonie is a commodity-linked currency, and as Canada is an oil producer and exporter, when oil prices fall, so does the Canadian currency. USDCAD rose in the US session from 0.9670 to 0.9764. Meanwhile crude oil fell from $102.53 to $99.90.
The US Dollar plummeted against the Canadian Dollar after the Bank of Canada released an announcement on its interest rate. Despite leaving its benchmark rate unchanged and as expected at 1 percent, the Banks hawkish report gave investors reason to expect a rate hike as early as September. This boosted the Loonie by some 63 pips, causing USDCAD to drop from 0.9717 to 0.9654.
Gold benefited from its safe haven appeal today making gains of over $18 Dollars. From the US session open, the precious metal rose from $1,531.48 to peak at its new one-month high at $1,550.23. The demand for gold was boosted after US manufacturing data came out much worse than predicted, undermining the US Dollar and spreading concern about the health of one of the world’s largest economies.